Al Gore on Budget & Economy

2000 Democratic Nominee for President; Former Vice President

1990s: Dems should not oppose a Balanced Budget

Some advisers said that Clinton could not move too quickly to balance the budget or he would upset the delicate balance among Democrats in Congress. A balanced budget by a date certain would require cuts "too painful for our people."

Gore disagreed.
He told Clinton that the administration would likely face a government shutdown in the fall because of the intensity of the philosophical disagreement with the Republicans and the likelihood of a massive miscalculation by Gingrich. "This is coming,"
Gore said, "and we have to prepare for it now. And when the crunch comes we have to have a position that will be seen as reasonable." The administration could not be in the position of opposing a balanced budget. "We can't go out and say to the American
people, it's not important to balance the budget," Gore continued. That bridge had been crossed with the 1992 election when Clinton promised to cut the deficit in half in 4 years. "We have to get right on the issue of balancing the budget," Gore said.

1993: Tie-break vote on budget; also passed House by 1 vote

The great budget battle finally ended in August, with the passage of Bill's economic plan. Before the vote, I had spoken with wavering Democrats. One Republican Congresswoman called me to explain that she agreed with the President's goal to tame the
deficit but had been ordered by her leadership to vote no regardless of her convictions. In the end, not a single Republican voted for the balanced budget package. It squeaked through the House by one vote, and Vice President Gore in his official role as
President of the Senate had to vote to break a 50-50 vote tie. Several courageous Democrats, who did what they believed to be in America's long-term interests, lost in the next election.

The plan wasn't everything the
Administration had wanted, but it signaled the return of fiscal responsibility for the government and the beginning of an economic turnaround for the country. To pay for these reforms, the plan raised taxes on gasoline and on highest-income Americans.

Bush’s policies made $4 trillion in surpluses disappear

Al Gore re-emerged in his home state tonight and unleashed a searing critique of George W. Bush’s policies on issues from the economy to the environment to campaign finance to health care. Gore even invoked former President Bill Clinton -
whom he steered clear of for much of the presidential campaign - in accusing Bush of squandering the last administration’s economic successes. “Not long ago, our economy was very strong because we made the right decisions,
decisions that reflected our values,“ Gore declared. ”Whatever anyone wants to say, I believe Bill Clinton and I did a good job on the economy.
But now, our economy is back in recession, an unbelievable $4 trillion in projected surpluses have disappeared in a single year and public investments in priorities like job training, school construction and health care are once again being slashed.“

Source: Richard Berke, New York Times
, Feb 3, 2002

Prosperity itself is on the ballot; keep “new-economy”

Gore rallied union workers and new-economy voters alike today, warning that the progress of the last eight years could “slip through our hands” if the country adopts the agenda offered by Bush. He argued that the technology-driven growth of the 1990s
could be stopped in its tracks by a return to the policies of the 1980s.

Arguing that “prosperity itself is on the ballot,” Gore focused on the new economy and what government should-and should not-do to ensure that the remarkable innovations in the
technology sector seen in recent years continue. “We face a big choice. Will we make the right decisions, the responsible decisions, to unlock the full potential of this new Internet economy and make it work for all our people?”

Responding to Bush’s
charge that he favors bigger government, Gore said, “government should never be a barrier” to the new economy, and he promised to preside over “a smaller, smarter government that knows when to get out of the way and isn’t a drag on economic growth.”

Source: Dan Balz, Washington Post, p. A10
, Oct 28, 2000

Paying down debt reduces government intrusion

GORE: The third biggest spending item in our budget is interest on the national debt. We get nothing for it. I will pay down the debt every single year, until it is eliminated early in the next decade. That gets rid of the third biggest intrusion
of the federal government in our economy. Now, because the governor has all this money for a tax cut, mostly to the wealthy, there is no money left over.

BUSH: What I’ve done is set priorities and funded them, and there’s extra money.

Source: St. Louis debate
, Oct 17, 2000

After 8 years of prosperity, “you ain’t seen nothing yet.”

[The current era of prosperity] started for me-in the last eight years-when I had the honor of casting the tie-breaking vote to end the old economic plan and put into place a new economic plan that has helped us to make some progress--22 million new jobs
and the greatest prosperity ever. But it’s not good enough. And my attitude is, you ain’t seen nothing yet. We need to do more and better. Too many people have been left behind. And the key is job training and investments in [social programs].

Source: Presidential debate, Boston MA
, Oct 3, 2000

Prosperity results from current policy plus entrepreneurship

BUSH (to Gore): I think the economy has meant more for the Gore and Clinton folks than the Gore and Clinton folks has meant for the economy. I think most of the economic growth that has taken place is a result of ingenuity and hard work and
entrepreneurship. And that’s the role of government, is to encourage that.

GORE: I think that the American people deserve credit for the great economy that we have. And it’s their ingenuity. I agree with that. But they were working pretty hard eight
years ago, and they had ingenuity eight years ago. The difference is, we’ve got a new policy. Look, we have gone from the biggest deficits to the biggest surpluses; we’ve gone from a triple dip recession during the previous 12 years to a tripling of
the stock market. Instead of high unemployment, we’ve got the lowest African-American and lowest Latino unemployment rates ever in history, and 22 million new jobs.

Make hard choices to keep prosperity rolling

Gore is using the nation’s roaring economy to sell himself as the man who will keep things humming along. “We cannot let this opportunity slip through our hands.” Gore said that as president he would use much of the projected federal surplus to reduce
the national debt rather than spend the money on “massive tax cuts for the few,” as he contends Bush would do. “We have to ask the hard questions about what is right for our economy and our families. We have come a long way these last eight years but I
am not satisfied. There are big choices at stake in this election. At the heart of all these choices is a single, fundamental question: Will we use our prosperity and record surpluses to prepare for the future?“ Gore said he would pay $2 of projected
surpluses toward debt reduction for every $1 he would devote to tax cuts or investments. ”The biggest threat to the economy & the continued prosperity would be a giant tax cut mainly for the wealthy that would put us back into deficits again,“ Gore said.

Source: AP Story, NY Times
, Sep 28, 2000

Helping middle-class is goal of economic plan

“The Gore-Lieberman economic plan,” he said, “has one guiding purpose: to help the middle-class families who have always been America’s purpose and pride, the people who pay the taxes, bear the burdens and live the American dream.”

Safeguard prosperity to reduce poverty

Realization of the goals that Gore laid out, like reducing the poverty level to below 10% for the first time in history, and increasing the college graduation rate to 75% of high school graduates, depend on continued prosperity. So does his plan to set
aside $300 billion as a cushion against shortfalls in projections by the CBO, which estimates a federal budget surplus of $1.8 trillion over the next decade. The sum of Gore’s spending initiatives, as presented by his campaign, is about $1.4 trillion.

Source: Katherine Q. Seeyle, NY Times
, Sep 6, 2000

Enable more families to save, own homes, and pay less tax

His centerpiece is to eliminate the debt by 2012. One goal of the plan is to double the number of families, to 65 million from 32 million, that have at least $50,000 in savings. Other goals include lowering the income tax burden on the typical family to
the lowest level in 50 years, raising the number of families who own homes to more than 70 percent, reducing the gap between what men and women earn by 50 percent and creating 10 million high-technology jobs.

Source: Katherine Q. Seeyle, NY Times
, Sep 6, 2000

Encourage “Retirement Savings Plus” accounts

By 2010, double the number of families with savings in excess of $50,000. Gore proposes “Retirement Savings Plus” accounts. If a middle-class family saves one dollar,
the government will match this with one dollar of savings. For poorer families, the government will contribute three dollars to a savings account for every dollar contributed. The maximum annual account contribution is $2,000 a person.

Confidence in markets & policy is basis for solid economy

My proposed economic strategy depends not just on spending or tax policy but on their interaction with financial markets & monetary policy. What links them is an intangible factor called confidence. If we allow our credibility to be called into question,
with ever-increasing deficits & debt, if we shake the confidence that we have worked so hard to rebuild, then that could lead to higher interest rates, draining far more investment from our economy than deficit spending could ever put back into it.

Source: Speech to the Association for a Better New York
, Apr 25, 2000

Economic slowdown would prompt Reinvention push

On how an economic slowdown might change his budget priorities: I’m a veteran of the Reinventing Government push, one who believes that eliminating waste doesn’t have to be a meaningless mantra.
That kind of fiscal challenge -- which I hope doesn’t occur -- could serve as an opportunity to push much more dramatic re-engineering of the way the government operates.

Source: Interview in Business Week, p. 42-43
, Dec 20, 1999

Clinton-Gore budget concepts broke cycle of recession

On Goreonomics: I’m not trying to take credit for [the Clinton boom]. I played a role, along with other members of the Clinton-Gore team. The concepts we put in place made a difference. I cast the tie-breaking vote for [the ‘93 Clinton budget],
a plan that passed on a straight party-line vote. Prior to that, we had a series of intermittent dips into recession. We broke that cycle.

Source: Interview in Business Week, p. 42-43
, Dec 20, 1999

Low interest rates are a key to strong economy

If the entire surplus is spent [on one proposal], then there is no money left over for new initiatives. The numbers have to add up. One of the reasons we have a strong economy now is because we’ve been able to keep interest rates low, balancing the
budget and better by having fiscal responsibility. So spending more than the entire surplus and then piling on top of that proposals that may sound great but for which there is no money is something that ought to be looked at very carefully.

Source: Democrat Debate at Dartmouth College
, Oct 28, 1999

Al Gore on Budget Surplus

Surest way to bust economy is Bush’s tax cuts

BUSH [to Gore]: The surest way to bust this economy is to increase the role and the size of the federal government. The Senate Budget Committee did a study of Gore’s expenditures: it could conceivably bust the budget by $900 billion. That means he’s
either going to have to raise your taxes by $900 billion or go into the Social Security surplus for $900 billion.

GORE: What he’s quoting is not the Senate Budget Committee, it is a partisan press release by the Republicans. And as for the surest way
to threaten our prosperity, having a $1.9 trillion tax cut, almost half of which goes to the wealthy, and a $1 trillion Social Security privatization proposal, is the surest way to put our budget into deficit, raise interest rates and put our prosperity
at risk.

BUSH: I can’t let the man continue with fuzzy math. It’s $1.3 trillion, Mr. Vice President. And it’s going to go to everybody who pays taxes. I’m not going to be a pick-and-chooser. What is fair is everybody who pays taxes ought to get relief.

Set aside $300B as a “Surplus Reserve Fund”

Gore and Lieberman’s plan, Prosperity for America’s Families, was released today as a nearly 200-page book. Significantly, Gore and Lieberman do not spend the entire surplus, but rather propose setting aside $300 billion in
a reserve fund that could not be used for new spending or tax cuts. This Surplus Reserve Fund would allow for further debt reduction or provide a cushion to help cover unexpected costs in the future.

$4.56 trillion spending plan for 10 years’ budget surplus

The Gore-Lieberman plan backs up [their 10-point list of economic goals in their “Prosperity for America’s Families” plan] with a detailed summary of how they would allocate the $4.56 trillion budget surplus projected for the next decade.
The major elements of the Gore-Lieberman Plan, include the following, (under CBO scoring, in billions):

Set aside one-sixth of surplus in case rosy estimates fail

It is hard to quantify the economic potential of the American people. But we can - and we are - setting concrete economic goals for the country, goals that reflect our values and honor our commitment to the future.

We are proposing - as a hedge
against overspending based on “rosy estimates” - that before Congress spends money under its more optimistic projections, it set aside one-sixth of the non-Social Security, non-Medicare surplus.

Free America from debt by paying down $3 trillion

Al Gore has a plan to keep paying down the debt, making America free of its publicly-held debt by 2012. The plan devotes a substantial portion of the total budget surplus to debt reduction.
Over the next ten years, the plan would pay down the debt by $3 trillion:

Use surplus to strengthen Social Security, Medicare

If we have the discipline and foresight to save the surplus, to pay off the debt and help Social Security and Medicare, we can go a long way toward saving Social Security and
Medicare for the future. If we squander the surplus on expensive tax cuts, we will likely force unnecessary and painful solutions - or even worse, we will pass these difficult choices to our children.

Assumes spending will grow at the rate of inflation; 2.6% annual growth

How surplus would be
used

For fiscal years

2002-2006

2001-2010

Tax cuts

$483 billion; total $1.3 trillion by 2010

$250 billion, includes some of Clinton’s FY2000 proposals

Some major spending
proposals

$46 billion for health care

$13 billion for education

$25 billion for defense

$64 billion to pay down the national debt

$432 billion for Medicare

$146 billion for health insurance

Source: NY Times, p. 22
, Apr 30, 2000

Pay off the national debt by 2013

My economic plan begins with fiscal responsibility - a consistent, conservative fiscal policy that keeps interest rates low and helps create jobs. I’ll balance the budget & pay down the national debt every single year, barring a national emergency.
I will put us on the road to completely eliminating the national debt by the year 2013. We have to make America debt-free before the Baby Boomers retire, so we can pay our obligations to them in the form of Social Security and Medicare. We have to make
America debt-free now, because, in the new era of globalization, businesses have far better investment opportunities than ever before in history. In this new economy, maximum growth without inflation requires that we take that money out of sterile
government bonds, and put it into enterprises that boost our productivity. And moving purposefully to a debt-free America will be one of the best ways to sustain and increase the confidence that is the foundation of our present and future prosperity.

Source: Speech to the Association for a Better New York
, Apr 25, 2000

Set aside 15-16% of budget surplus to fix Medicare

We have to look ahead and save some of the budget surplus for Medicare. If we wipe out Medicaid and wipe out the chance to save Medicare, and wipe out the surplus, then you might get a few more people in the short run..
Medicare cannot be an afterthought. The only way to fix Medicare fairly is to set aside 15 to 16 percent of the surplus to do it now. Otherwise, you’re putting Medicare at risk.

Source: Democrat Debate at Dartmouth College
, Oct 28, 1999

Balance or surplus except in crises.

Maintain fiscal discipline to keep interest rates low and investment rates high. Barring an economic reversal, a national emergency, or a foreign crisis, Gore has called for a balanced budget -- or better -- not just this year, but every year.